Cartier Fined for Sanctions Violations

An assistant poses with a Star of Sierra Leone 968.9 carat diamond ring and a 7.13 carat diamond Cartier bracelet during a sale preview at Christie's auction house in London on Oct. 20, 2016.
Photo:
Reuters

The parent company of jeweler Cartier was fined for violating U.S. sanctions after it sold items and shipped them overseas to an entity on the U.S. blacklist.

Cartier, on four separate occasions, sold jewelry to an individual at a store in California or Nevada who provided the name of a Hong Kong entity under U.S. sanctions since 2008 as the ship-to location, according to the U.S. Treasury Department’s enforcement notice. The buyer provided the same name, address and country location for the entity, Shuen Wai Holding Ltd., but Cartier “did not identify any sanctions-related issues with the transaction” before shipping the jewelry, Treasury said.

The company agreed to pay $334,800 to settle its sanctions liability, Treasury said. Cartier “failed to exercise a minimal degree of caution or care” concerning the conduct that led to the violations, Treasury said, using the case to call on retailers to develop sanctions-compliance programs, suggesting factors for assessment such as the frequency with which they sell items overseas, and to whom they sell those items.

“This enforcement action highlights the risks for companies with retail operations that engage in international transactions, specifically including businesses that ship their products directly to customers located outside of the U.S.,” the notice said.

Retailers aren’t “necessarily wired” to think about sanctions compliance, said Dave Murray, the vice president for product development and services at the Financial Integrity Network, a group led by former U.S. officials that advises governments and financial institutions on how to protect themselves against illicit financing threats. Mr. Murray previously was director of the office of illicit finance at Treasury.

Mr. Murray said it’s important to remember that U.S. sanctions apply to everyone, and not just financial institutions, citing the large bank cases that garnered great attention over the years.

“At the end of the day, the prohibitions apply to everyone equally, whether you’re a big bank or a retailer. There’s some lack of awareness of that,” he said.

Write to Samuel Rubenfeld at Samuel.Rubenfeld@wsj.com. Follow him on Twitter at @srubenfeld

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